Running Head: DOLLAR GENERAL

Dollar General Strategies Glenda Reese Managerial Marketing BUS 620 Professor Mary Wright July 8, 2012

DOLLAR GENERAL Dollar General Strategies Two important strategy concepts that need to be implemented for successful marketing within a business are market segmentation and a generic marketing strategy. Market segmentation is defined by Mullins & Walker, Jr. (2010), as the process by which a market is

divided into distinct subsets of customers with similar needs and characteristics that lead them to respond in similar ways to a particular product offering and marketing program (p.180). Generic market strategy is based on three strategies, one of which applies dominantly more than the other two in a business. These strategies, as stated by Mullins & Walker, Jr. (2010), are (1) overall cost leadership, (2) differentiation, and (3) focus (p.227). These two concepts will be seen in the assessment of the Dollar General store in Imboden Arkansas. The assessment will concern prices, customers, and location. Thus determining Dollar General of Imboden Arkansas market segmentation to be for the lower-, middle, and fixed- income people and the generic marketing strategy used to be the overall cost leadership strategy. Prices Prices inside the store are cheaper on an overall basis when compared to the local market less than one quarter of a mile away. Products that are used frequently, such as toilet paper, laundry detergent, bread and milk are usually a dollar cheaper and sometimes cheaper than that. Dollar General Stores no frill displays and small inventory allow the store to provide these cheaper prices because management is able to keep the organizations overhead costs down. When comparing prices one is able to see the difference Dollar General provides for its customers. For example, Alexander (2011) provides a product/price comparison between Dollar General and Wal-Mart for the following items people probably purchase on a regular basis: (1)

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cheerios cereal, 9-14 ounce box is $2.85 at Dollar General and $3.50 at Wal-Mart, (2) Tide liquid detergent, 75 ounce size, is $10.50 at Dollar General and $12.97 at Wal-Mart, and (3) Lysol disinfectant spray, 12 ounce can, is $4.25 at Dollar General and $4.22 at Wal-Mart. These price comparisons depend on which region the customer is from, but these prices are very close to the situation at Imboden Arkansas (2). Alexanders list covers more price comparisons, but these three items alone show a savings of $3.09 to the customer. Customers The customers of Dollar General come in all ages and both sexes, but the majority entering Imbodens facility are women. Approximately 80-85 percent is female. The income level for the customers at this facility is from low-, middle, and fixed incomes. This was determined from observation and knowledge of the people entering the store. Most of the customers observed lived within a three to five mile radius of the store. Almost half, about 4045 percent, of the visitors were over the age of 55 years. Furthermore, the United States Securities and Exchange Commission (2011) says approximately one-fourth of the customers have a less than $20,000 per year income. Location The Imboden store is located on the West side of the small town. This places the facility about five miles from the next town if one is traveling west, about eight if going east, and about 25 if going north or south. The stores location makes it a very convenient place for people to access for items used on a frequent basis. The next nearest Dollar General would be west, about eight miles away. Having the store in Imboden eliminated a lot of traveling for a large amount of people, especially the elderly.

DOLLAR GENERAL Conclusion Two important concepts that need to be implemented for a successful marketing campaign are market segmentation and the use of one generic marketing strategy, one of which is overall cost leadership. During an assessment of the Dollar General of Imboden Arkansas, it was determined that the type of market segmentation for this facility encompassed more of the less wealthy customers because that is the type people that comprise the majority of the population in the area. The generic marketing strategy dominantly seen was the overall cost leadership. This strategy was determined through the prices seen throughout the store and the stores cost of operation. While Dollar General may not be as stocked as the neighborhood WalMart, for everyday items such as laundry soap or cleaning supplies, this is the place to shop.

DOLLAR GENERAL References Alexander, M. (2011, January 7). Dollar General vs. Wal-MartPrice comparison on 10 Standard grocery items. Retrieved July 7, 2012 from http://www.dailyfinance.com/2011/01/07/dollar-general-vs-walmart-price-comparisonon-10-standard-gr/

Mullins, J.W., & Walker, Jr., O.C. (2010). Marketing management: A strategic decision making Approach (7th ed.). Boston, MA: McGraw-Hill Irwin. United States Securities and Exchange Commission (2009, January 30). Annual report pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934. Retrieved July 7, 2012 From http://www.sec.gov/Archives/edgar/data/29534/0000029534000014/f200810Kfinal.htm